Fool Me Twice, Shame on Me

 

Some things just defy logic.

For example, why does Hawaii have interstate highways?

How did former New York Mets’ owner Fred Wilpon – a victim of not one, but TWO Ponzi schemes including the massive one perpetrated by Bernie Madoff which almost cost him the team, get appointed to the Financial Committee of Major League Baseball?

You get the idea.

Then can someone please explain to me how does a person sentenced to 24 years in prison for investor fraud and was complicit in one of the largest bankruptcies in the annals of American history, somehow get enough financial support to launch an investment venture?

Sounds absurd right?

But in the category of “you can’t make this stuff up,” Jeffrey Skilling the onetime CEO of Houston-based energy conglomerate Enron, has kicked off Veld LLC, described as a digital marketplace to sell packages of oil and gas production to investors. The entity promises to “lend a “technology edge” to oil and gas returns.

For those who were either too young to remember or living somewhere in the Himalayas in 2001, a bit of background on Mr. Skilling.

He along with then-Enron chairman Ken Lay, and a handful of senior auditors at the Houston office of now-defunct CPA firm Arthur Andersen conspired to book more revenue than the company earned, while keeping incurred losses and debt off the balance sheets and funneling them through a complex network of off-balance sheet entities. That bit of financial prestidigitation eventually resulted in a $63.4 billion dollar bankruptcy. His defense? “I’m not an accountant.” Which was laughable to be sure but technically true as he was not a financial executive but rather a former consultant at McKinsey & Co. At Enron, Skilling helped build the company into one of the 10 largest in the U.S.

Lay suffered a fatal heart attack while awaiting trial while Skilling eventually served 12 of his 24-year sentence.

Thousands of Enron employees lost their life savings and Arthur Andersen ultimately collapsed.

According to various reports, Skilling told potential investors in his new undertaking that he had secured significant financial commitments to the tune of tens of millions in financing.

He has since raided McKinsey’s HR ranks luring two top executives to Veld.

This “opportunity” sort of reminds me of those three card monte games in Times Square where black knee sock tourists become transfixed watching one person consistently win, unaware that he and the dealer are a team and then are stunned when they are cleaned out in short order.

A fool and his money are soon parted. I’ve never seen anything in my life that would refute that sage observation.